Illinois collision repair shops will soon have a new tool for resolving disputed insurance claims. Gov. JB Pritzker signed House Bill 4160 into law Aug. 7, creating Public Act 104-0767 and establishing a right to appraisal that lets Illinois policyholders demand an independent review when they disagree with their insurer over the amount of a physical-damage loss, according to the Illinois General Assembly's bill status record.
The Illinois governor's office confirmed the same day that the bill was signed and described it as legislation that "establishes the right to appraisals for resolving disputes related to vehicle total loss settlements."
The law, enacted as a new Section 398 of the Illinois Insurance Code, takes effect July 1, 2027, and applies to every automobile insurance policy issued, renewed, or delivered in Illinois on or after that date that includes first-party coverage for physical damage. An insured can invoke appraisal at their sole discretion, without needing the insurance company's consent, whenever there is a dispute over the amount of a loss; the insurer holds that same right to invoke appraisal, though the no-consent language applies specifically to the insured's side.
Once a dispute arises, either party can submit a written demand for appraisal, and each side then has seven business days after receiving that demand to select its own "competent and disinterested" appraiser, per the statute's text. The two appraisers have five business days to independently determine the loss amount; if they can't agree, they jointly select an umpire, and either party can ask a court to appoint one if the appraisers can't agree on an umpire within 15 business days.
An agreement by any two of the three, the two appraisers or one appraiser and the umpire, is binding on all parties. Each party pays for its own appraiser, and the umpire's cost is split equally.
HB 4160 looked different when it was filed with the House Clerk on Oct. 15, 2025. The introduced version would have extended appraisal rights to third-party claimants and created an Automotive Appraisal Standards Advisory Board to issue nonbinding rulemaking recommendations to the Illinois Department of Insurance. Both provisions were removed together in House Floor Amendment No. 1, adopted April 14, and the enacted statute contains only the first-party claims process described above.
Illinois joins Texas and Washington
With Pritzker's signature, Illinois joins other states like Texas and Washington that require a right to appraisal for auto physical-damage claims. Texas' SB 458 took effect Sept. 1, 2025, and the Texas Department of Insurance has since been writing rules to formalize consumer notice of the right.
Washington's version, SB 5721, applies to auto policies issued or renewed on or after Jan. 1, 2026, and one Tacoma shop has already used it to close a gap of about $10,000 between an insurer's offer and the appraised repair cost.
